Does Your Insurance Company Owe You Money For COVID-19 Business Interruption?

COVID-19 has placed a substantial strain on businesses around the country.  Although programs such as the Paycheck Protection Program have helped ease the financial stress for some businesses, many are still enduring enormous financial losses.  While federal and state governments continue to look for more options to fund businesses, you might have other options.  Specifically, your existing business interruption insurance may cover any losses caused by the coronavirus.

Business Interruption Insurance is insurance that essentially replaces your business’s lost income due to a disaster.  This is typically added to an already existing property-casualty policy, but it could also be included in a comprehensive package policy.  In other words, it is not a separate policy, and you may have coverage even if you don’t remember specifically adding it.

Many businesses carry this type of insurance to cover the loss of income in the event of a natural disaster or fire.  The issue is that the coronavirus is not a fire or natural disaster.  So then, how do you know if your business interruption insurance covers an event like the coronavirus?  The answer to that question lies within the language of your individual policy.

In order for your policy to cover income loss related to the coronavirus, your policy must include certain “events” or “perils” that would include the coronavirus.  Some examples would include:

• Loss from Virus, Bacterium, or another Microorganism. Many insurance providers stepped away from including this language in insurance policies after the SARS outbreak in 2003 and Ebola outbreak of 2014-2016.  Regardless, it is worth looking into to see if that language exists.
• Civil Authority. If your policy includes loss from the actions of civil authority, you may be entitled to insurance proceeds.  Acts of civil authority would an Executive Order mandating that your business be closed.

If your insurance policy does cover one or both of the above “perils,” you should be eligible to receive compensation for the loss of revenue you have suffered due to the coronavirus.  You might even be eligible for compensation for other losses, as well.  Additional areas to check for coverage in your policy include, without limitation:

• The loss or destruction of property. For example, did the Governor’s Stay-at-Home order cause your business to lose perishable property?  Because of the threat of coronavirus contamination, did your business have to destroy or dispose of property?  If so, your insurance may cover your loss or the cost of replacement.
• Travel Expenses for your business may also be covered. While many airlines and travel accommodators are assisting small businesses with changes in traveling, your insurance policy might also provide for travel-related losses.  First, consider whether you purchased travel insurance or if the credit card you used for your purchase covers cancellations or itinerary changes.  Second, depending on your policy, your business insurance may also cover travel cancellations or itinerary changes.  Remember, for either of these options, the policy must cover the coronavirus as an “event” or “peril” causing the cancellation/change.
• Costs to Clean and Sanitize may also be covered by your insurance policy. If the plan covers an event related to coronavirus, you may be entitled to costs caused by the virus or needed to mitigate the effects of the virus.  This could include the cost of additional labor to clean and sanitize your facilities, additional cost of cleaning supplies, or the cost of purchasing protective equipment such as masks and “sneeze guards.”

Unfortunately, insurance contracts are lengthy and often difficult to navigate.  We are here to help. To find out if your insurance policy covers your losses due to the coronavirus, contact Grewal Law PLLC for assistance.